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this is Mike Hussein I'm on the faculty here at the Wharton School with the McNulty leadership program and I have
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the privilege today of speaking with Dave nice wonder who is the chief executive of the organization that is
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the winner of our annual Lippman family prize which comes with a cash award two hundred and fifty thousand dollars for
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his service as CEO of the world bicycle relief organizations so Dave great to have you here for a dialogue hey thanks
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very much Mike it's great to be here Dave just to get right into it tell us a
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little bit about the organization and its origin and then also bring yourself into it how did you get involved sure
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well we're by Scalise about fourteen years old this year and started as a disaster relief to the Indian Ocean
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tsunami and if you remember in December 2004 that terrible devastation that took
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place and like all of us sort of looking what can we do differently well two brothers and a family sort of came
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together and they were the day family sort of thinking through what can we do differently they had started an
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organization called SRAM corporation about 30 years ago SRAM corporation if you're not a cyclist is probably not a
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household name but they're the world's second largest and us largest bicycle
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component manufacturer making very high-end products for Tour de France type bikes and FK day and his wife Leah
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and the leaders of SRAM said well what can we do we have global operations with bicycles make a difference in that
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disaster recovery and with that FK and Leah went over to Sri Lanka and and spent time with development workers and
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development organizations that were just just getting started as far as the recovery and then the development and
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and most of them said no no please just send us money we're fine but we did find
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a partner and delivered a program of about 24,000 bicycles a third of those went to health care workers that were
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helping with the disaster recovery a third to students that were reconnecting with school and a third to entrepreneurs
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an example of the efficient that was displaced because of the tsunami now having to reconnect with the marketplace
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and from that it was almost going to be a one and done but there was a good impact study that was done and said you
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know what this made a huge difference people with bicycles all the sudden had better
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access to healthcare education economic opportunities and what should be done what happens unfortunately the the two
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hundred and thirty thousand plus people that perished in the tsunami well that happens every six weeks in sub-saharan
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Africa based upon preventable disease hunger and other challenges in mobility in Africa is a huge challenge if there's
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over a half a billion people in sub-saharan Africa that are in the rural areas that means they're primarily
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walking and so our first program actually was in Zambia it was a program that was funded by the US government
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combating the HIV epidemic this is back in 2006 and they had a challenge they had 23,000 volunteer health care workers
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that were going doing angels work they're going to their community going to do home-based care going to work with
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orphans and vulnerable children and they had a challenge because they were walking long distances and unfortunately
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the bicycles that were there in them in the marketplace just were not a very high quality and they had those bicycles
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breaking down it was a disincentive the care was not getting out they need a transportation solution so the folks
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that were running that program reached out to FK and that's sort of when I came
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on board at the same time I was actually the first employee down on the ground in
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Zambia back in 2007 and started implemented program but what we found was the bicycles readily available just
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not of high quality and so started thinking and designing in FK with his background in product development at
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ramp Corporation says you know what well we can do is start designing for purpose
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we can start looking and taking our expertise at product development that's been used at the high end of the cycling
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industry and how can we apply that to the lowest part of the economic pyramid and with that we've gone through an
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evolution with working with what we now call the buffalo bicycles so the heavy-duty bicycle that is about 50
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pounds of Steel 50 pounds of love can hold over a hundred kg 200 pounds on the rear carrier
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has a single-speed durable kickback break it's a tool for people to help themselves so David that's really
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interesting because you reference of course the famous or infamous earthquake that came out of Indonesia Indonesia
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sorry call I think was a nine point four record recording earthquake at the time
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in a tidal wave tsunami is it's more properly puts went throughout the region
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reaching Sri Lanka India much of Africa as well and I think from talking with many other organizations and individuals
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events of that kind the earthquake that hit Haiti the disasters that saved came in the earth wake of the earthquake in
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Japan back in 2011 have had a remarkable impact disasters they were but bringing
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people into taking some kind of action and now thinking about your own interweaving of your personal biography
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with that how did you get sure I've been with the organization twelve years so I
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was actually the first employee on the ground in Zambia which is where we did our first program and and my background
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was growing up going to business school went on and did a 15 year career in investment banking and and primarily
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focusing on how to take banks public and with that realizing at 15 years and facing down 40 thinking well you know
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what maybe I need to be doing something different with my life maybe I need to sort of look of something of impact and
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at that time I I fortuitously met f-k and his wife Lee on a safari in Kenya randomly and with that chance meeting
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got to learn more about the organization was really intrigued and a series of circumstances opportunities happen and I
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got to Zambia and what I saw was one the great need that the the issue of distance the issue of people having to
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travel and when their primary mode of transportation is by foot how can that be overcome and then looking and
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listening to FK who is a leader in the bicycle industry saying I think I I think I know how we can work on this and
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so we have a motto as all answers are found in the field and so spending lots of time with the people on the ground
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and listening to them and seeing where that opportunity to take the top in product development that
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FK and SRAM corporation brought in giving a voice to those at the bottom of the economic pyramid I was just inspired
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so within that first trip to Zambia I actually moved there within six weeks went on a sabbatical from my investment
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bank and again that was twelve years later so I was about ten years in Africa sort of setting up our programs and
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operations look at a country expansion program expansion and then recently came back to the u.s. to take on the role of
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CEO David Accenture I think you're in the best tradition of development efforts and that is to listen to the
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people on the ground that your effort is intended to benefit and that's been a
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thought around in the work of the World Bank of US Agency for International Development and many foundations taken
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more seriously by some than others but as you listen to those in the field as you were looking for your founder was
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looking to somehow assist people in this particular region I think Sam Bo is where you first got going why did the
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issue of bicycles come up how did that that particular need become articulated to what do your founder and then as you
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heard it as well we were approached by a large US government funded organization
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program that was actually combating HIV and AIDS and so this is back in 2005 2006 and they were training and and and
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putting together an army basically a volunteer health care workers that were treating people with HIV and AIDS and
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they were doing home based care and caring for the over million orphans that were created because of that pandemic
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and in Zambia alone and they had a challenge they had 23,000 and those volunteer health care workers that were
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having to travel long distances to go to do the important work they were doing in
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the home-based care and caring for these orphans and unfortunately the bicycles that were readily available because
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bicycles are part of the culture in the end in Zambia and must moach most of sub-saharan Africa where a very poor
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quality and so these bicycles we affectionately call them bicycle shaped objects or be SOS
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these BS OS simply are not up to the challenging terrain and condition that are found there the suppliers of them
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have become completely disconnected from that end user and so with that and in the cheapening of the design the
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bicycles fall apart literally as you ride these bicycles pedals break off wheels collapse they simply don't work
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and so that's where they came to us and said is there a way you can help is there a way you can look at potentially
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helping us overcome this challenge of distance and FK you know took in his product development background took the
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best of the bicycles of the that he could find in the marketplace and said well let's test these out and doing
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testing protocols and what he found is that they fail damn it pretty quickly so they said well what we can do is sort of
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take the best of the worst and start building on that and that's really the evolution of our bicycle we call it the
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buffalo bicycle that is a heavy-duty 50 pounds of love there's a lot of steel in
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that and and can code over 200 pounds on the rear carrier so having a reliable tool for people to help themselves to be
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empowered to make their own decisions to change their own world is really our mission they very different from biking
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in let's say the United States you're probably a biker I'm a biker that's recreational and kind of grew up
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with it as a kid loved to watch the Tour de France and bicycles in that sense and
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in the West are often an object of leisure of fun of recreation of sporting you've just made the point that then in
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some settings bicycles are the necessity yeah absolutely there's over half a
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billion people in sub-saharan Africa that are living in the rural context that means that walking is their primary
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mode of transportation so when you're trying to take your sick child to the clinic and that clinic is ten miles away
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you're walking there all day to get to that child to the clinic or if you're a
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student you're having to walk seven miles to get to school one way and you're an adolescent girl and their
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safety concerns in that you know having a bicycle is really a life changer let alone any person that started a business
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or knows about you know building up as an entrepreneur transportations often part of that
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process and so if you're transporting your produce to the market maybe not the
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markets that's the closest but maybe that market that's a little further away
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but there's better prices there all those things are coming together and that's why it's interesting working in
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this field of development because really bicycles are cross-sectoral okay we've
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got a couple questions on your business model to use a business term here let's
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start with the funding how do you put together cash to buy the bicycles sure it's sort of interesting I mean we sort
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of started off as I said as a disaster response and so we got a wonderful response from SRAM corporation the other
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industry leaders and in from Trek from specialized from Cannondale working with giant bicycles tata bicycles all those
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people coming together to help us with that initial response and continuing assistance and then individuals cyclists
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so we've we've sort of grown up with grassroots fundraising where we've sort
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of evolved into though as we've studied the impact of our programs and started
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being able to do research and so to show that actually with a bicycle a girl is 28% more likely to have improved
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attendance and 59 percent improvement in her academic performance a farmer can carry and increases income by 23 percent
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using a buffalo bicycle to carry his milk to this to the dairy so all those things was restricting those information
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we're now starting to you know engage more major donors as well as institutions and really highlighting the
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issue of distances and in transportation what became interesting when we first started delivering the improved bicycles
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the Buffalo bicycles into our programs what we found is people started knocking on our door people started saying hey
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I've seen your bicycle in the field it's better than anything else that's out
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there I want that bicycle I want that bicycle for my healthcare program I want that
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bicycle because I'm a farmer and I see how strong it is I want that bicycle to
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take my kids to school how can i buy one now FK and I sir scratched our heads and looked at each
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other so okay well what do we do with this we as a small nonprofit we weren't
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prepared to fund those philanthropic lis through donations but there was a strong
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demand out there so we worked with some very good attorneys and Deloitte and making sure you know as far as the IRS
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and we came up of a very innovative structure where we have world bicycle leaf the nonprofit that owns 100% of
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Buffalo bicycles the for-profit entity and so Buffalo bicycles sells bicycles to nonprofit organizations that are
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doing development work in health care education some of our big partners customers are UNICEF World Vision Care
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International those type of organizations that realize that mobility and having a strong bicycle in their
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program actually helps them achieve their goals and helps improve their key performance
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indicators to use another business term but what we're seeing is more and more
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individuals are purchasing our bicycle because it's an interesting design challenge when you think about when
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you're serving this bottom of the economic pyramid we could have gone off and designed a very fancy in a very
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strong bicycle at let's say 350 dollars okay that's a reasonable price for a
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good bicycle here in the US well that's not meeting the customer where they are
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that's not serving the markets that we were serving and so working within the
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constraints of the engineering product development existing supply change making sure that our bicycle is also
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compatible with the existing spare parts that are readily available it's a really
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interesting design challenge and so again taking that top in product development knowledge that comes from
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SRAM corporation and FK and how can we apply that to give a voice to that bottom of the market consumer we've
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actually just started opening up over the last 18 months retail outlets and these are Buffalo bicycle shops small
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little shops right there on the main drag and in different regional towns throughout Zambia Zimbabwe Kenya Malawi
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and we're seeing great uptake we're seeing that individuals when given a
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choice when given voice they will go for the buffalo bicycle truly interesting Dave in a
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sense that it sounds like you're a bit of a hybrid between a purely philanthropic driven organization where
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you have the product that people need and you'll give it to them often what happens in the immediate relief after a
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disaster the Red Cross comes in and and whatever's required is given away to
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those much in need but you're also letting the market speak a bit so those who have a real need for a bike at an
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affordable price point are able to walk in and get what they really couldn't get
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from any any other provider in the region that sound about right it does it's it's interesting well first of all
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with with F K's background with SRAM corporation my business background we really sort of approached the whole
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organization the growth organization is how can we apply best business practices
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to development and one of the first things with best business practices is know your customer know your environment
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and I think there's a challenge with a lot of development programs and organizations a lot of times it's
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top-down you know we have an idea that we think we should implement our motto of all answers are found in the field
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and so you go and you understand and be empathetic to those customers where they
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are what their needs are and you and you give them a voice and so I think that's
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the difference in in what we're trying to achieve to make it kind of a personal
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moment if I'm in a speaker the capital of Malawi a long way and I'm thinking I
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could really use a bike in this region because I'm doing some back roads so looking at some of the agricultural
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development projects can I walk into a bike shop and buy one of your bikes you can you can we have actually two outlets
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in the long way currently a buffalo bicycle standalone shop which is in the main shopping area of the long way as
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well as our assembly facility and to give our listeners and viewers and readers a sense for what it means to buy
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that product in the capital of Malawi you can walk into stores near here by cycle shops near here and spend a couple
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thousand dollars and even much more for an extremely high-end roadbike what's what's your average
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retail price for the lady yeah in a long way it's about a hundred and forty five dollars it varies by
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different countries because of the different cost of transportation and import tax and duties that are
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unfortunately even put on the bicycles as they come in so about one hundred and forty five dollars which when we compare
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to the bicycle shaped objects is often twice the amount of what they are and so it was a real question for us it was
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really an open question of will this value proposition of quality and price be the right fit for that marketplace
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and so what we really were going out to try to figure out is is this going to work is is this really going to be
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something that we can be driven but that's what we found is in fact what is it's the right value proposition for
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that market and I'm thinking among the distinctive features is probably a couple gears not hydraulic brakes and a
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very big carrier on the back wheel well we're working on gears that's the big
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challenge quite frankly we have to it's expensive and not derale eur which is
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your typical you know change it there's a lots of issues with that first of all
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it's very vulnerable out there as you're out there clunking around and and and
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doing different things and again the terrain and conditions we have a saying also that africa probes for weakness so
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when you have open mechanics like that let alone the cable and housing to get to that activator it's that's that's
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vulnerable and so what we have actually a standardized as a coaster hub so it's
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a contained hub that's sealed that's a kickback break so the braking system and the drivetrain is all sort of
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contained within that rear hub what we're working on is how do we get multiple drivetrain that's reliable
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repairable durable in that context that's built for that context and actually we have top engineers around
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the world focused on that advanced product development to create a new category of product that's for this
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marketplace okay the last question about your business model I'm a Malawi farmer
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mm-hmm I'm gonna have a lot of cash after I sell my crop but I don't have a
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pen right now so can I make this a some kind of GE Capital kind of loan to get me
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going in it can I borrow the money yeah absolutely we started to talk about sort
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of a three-legged stool if that makes sense as far as reaching this consumer we want to have one the right product so
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the product and the right quality value proposition secondly we have to have the
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distribution so making sure that we have the shops that are out there making it accessible as it relates to physical
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locations third it has to be sort of financial accessibility and so we have programs of microfinance we partner with
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microfinance organizations we have Leia ways where you sort of pay as you go so they can pay for the bicycles over three
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to six months it's great let's think about the future I think you cited earlier on reaching some 400,000
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recipients so far let's take it five years forward is now 2024 Wow what's
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your target number I think we're gonna be in the millions of bicycles at that
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point I think part of what we're doing is one raising the awareness of the challenge of distance and the fact that
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the quality bicycle can really help overcome that barrier of distance so I think we're going to get more and more
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we want to be the mobility solution within larger development organizations and so spending time with development
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leaders that are doing programs in healthcare education how can we be a mobility solution to help them out and I
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think this this individual market this you know there as I said over half a billion people living in the rural areas
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in sub-saharan Africa alone that are looking to that are most likely walking as their primary mode of transportation
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and with that a bicycle could be really helpful quality bicycle make a difference and I think we're also be
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expanding outside of sub-saharan Africa and be looking at other areas in South America we've done programs in Southeast
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Asia as well there's 450,000 bicycles are in 219 countries so Dave to borrow a
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phrase from zero to a million in just a few years and from your experience looking back you've been there pretty
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much from the start for those who are interested in become involved in in this world not
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necessarily bikes but providing services and everything else that much needed in
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many regions of the world including obviously microfinance what are a couple of the kind of experience founded
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principles did you operate on now that others could make use of sure that's a
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great question I think looking at you know listening to best practices and development that would include focusing
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on the field having a field focus versus having a focus that is about of following the money so I think it's
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important for us to sort of think through and make sure that we are listening to the end user and making
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sure that we are also working in collaboration we have a model of partnership so our model doesn't work
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unless there's a partnership in the field when with the communities that we work with as well as other leading non
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nonprofit organization development organizations as well as the government so we're working closely with the
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ministries of Education and the minister now so it's a collaborative effort I
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think you know the focus that we've also you know are what I would say our flagship or program is focusing on girls
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education and girls in that area in the developing world to have the toughest time of any demographic clearly and so
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educating girls truly helps break that cycle of poverty and disease and so what we found with our program providing a
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bicycle which in that context in the rural context of sub-saharan Africa that bicycle is going to be the most valuable
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asset in that household all the sudden you tie that girl's education to that
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most valuable asset it changes her negotiating power and Al's her to have a voice and what her future looks like so
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we're really excited to see that we actually have a randomized control trial
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study that's coming out by innovations for poverty action and it's showing
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great improvement as it relates to not only educational outcomes but also girls empowerment outcomes
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a final question for you as the recipient of the 2019 lip family prize a cheque of $250,000
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is in your hands and as you think about its immediate application nothing to be written down here but just thinking out
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loud what do you intend to I don't know leverage with that or make happen now
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that you have it well first of all we're very grateful for the Lippman family
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prize as well as you know this option awesome opportunity to engage with the University of Pennsylvania community so
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we're very excited about that as it relates to the financial gift we're very
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grateful and excited to be able to expand our impact and and deliver more bicycles to students to healthcare
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workers to create the availability for entrepreneurs it really goes a long way so we're very excited about that it's
00:25:08
great for somebody who'd like to find out more about your operation and where
00:25:12
would they go sure we have a great website choose check us out at www.davidpakman.com
00:25:22
[Music] you